Alliance Laundry Holdings LLC Reports 2013 Second Quarter Earnings

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Alliance Laundry Holdings LLC Reports 2013 Second Quarter Earnings

Record revenues and operational execution lead to increased earnings in the second quarter

RIPON, Wis.--(BUSINESS WIRE)-- Alliance Laundry Holdings LLC announced today results for the three and six months ended June 30, 2013.


Net revenues for the quarter ended June 30, 2013 increased $13.5 million, or 10.4%, to $142.4 million from $128.9 million for the quarter ended June 30, 2012. Our net income for the quarter ended June 30, 2013 increased $4.0 million to $10.0 million from $6.0 million for the quarter ended June 30, 2012. Adjusted EBITDA (see "About Non-GAAP Financial Measures" below) for the quarter ended June 30, 2013 increased $4.6 million to $29.0 million from $24.4 million for the quarter ended June 30, 2012.

The net revenues increase of $13.5 million was attributable to increases in United States & Canada revenues of $11.2 million, Europe revenues of $1.5 million, Latin America revenues of $1.1 million and Middle East & Africa revenues of $0.5 million. These increases were partially offset by lower Asia revenues of $0.8 million.

The net income increase of $4.0 million for the quarter ended June 30, 2013 was attributable to improved gross profit of $6.9 million and lower loss from early extinguishment of debt of $6.2 million offset by higher interest expense of $4.8 million, higher selling, general and administrative expenses of $2.5 million, higher other costs of $0.3 million and a higher provision for income taxes of $1.6 million.

Net revenues for the six months ended June 30, 2013 increased $18.9 million, or 7.7%, to $265.0 million from $246.1 million for the six months ended June 30, 2012. Our net income for the six months ended June 30, 2013 increased $3.2 million to $14.7 million from $11.5 million for the six months ended June 30, 2012. Adjusted EBITDA for the six months ended June 30, 2013 increased $8.6 million to $51.4 million from $42.8 million for the six months ended June 30, 2012.

The net revenues increase of $18.9 million was attributable to increases in United States & Canada revenues of $14.9 million, Europe revenues of $1.5 million, Latin America revenues of $1.0 million, Asia revenues of $0.9 million and Middle East & Africa revenues of $0.6 million.

In announcing the Company's results, CEO Michael D. Schoeb said, "We are pleased to report record revenues for the 2013 second quarter and significantly increased earnings versus the prior year. Strong demand in the U.S. from new products, improved economic conditions and continuing momentum in international markets contributed to higher sales. We were encouraged to see double digit growth in three of our five geographic segments."

Schoeb concluded, "While a level of caution remains around the broader economic environment, we continue to be confident in the opportunities that lie ahead. Our continued investments in new products, value-added services and international will enhance our market position across the globe."

About Non-GAAP Financial Measures

In addition to disclosing financial results that are determined in accordance with generally accepted accounting principles (GAAP), we also disclose EBITDA and Adjusted EBITDA, which are non-GAAP measures. We have presented EBITDA and Adjusted EBITDA because certain covenants in our December 2012 Credit Facilities are tied to a ratio based on these measures. "EBITDA" represents net income before interest expense, income tax provision, depreciation and amortization (including non-cash interest income). "Adjusted EBITDA", as defined in our December 2012 Credit Facilities, is EBITDA as further adjusted to exclude, among other things, certain non-recurring expenses and other non-recurring non-cash charges which are further defined therein. EBITDA and Adjusted EBITDA do not represent, and should not be considered, an alternative to net income or cash flow from operations, as determined by GAAP, and our calculations thereof may not be comparable to similarly entitled measures reported by other companies.

Under the First Lien Credit Agreement, if the aggregate outstanding amount of the revolving credit loans and letter of credit obligations is in excess of 20% of the lenders' current revolving credit commitments, we are required to satisfy a maximum Total Leverage Ratio, as defined therein. To the extent that we fail to maintain this ratio within the limits set forth in the First Lien Credit Agreement, our ability to access amounts available under the December 2012 Revolving Credit Facility would be limited, our liquidity would be adversely affected and our obligations under the December 2012 Credit Facilities could be accelerated. A reconciliation of EBITDA and Adjusted EBITDA with the most directly comparable GAAP measure is included below for the three and six months ended June 30, 2013 along with the components of EBITDA and Adjusted EBITDA.

About Alliance Laundry Holdings LLC

Alliance Laundry Holdings LLC is the parent company of Alliance Laundry Systems, a leading designer, manufacturer and marketer of commercial laundry equipment used in laundromats, multi-housing laundries and on-premise laundries. Under the well-known brand names of Speed Queen®, UniMac®, Huebsch®, IPSO® and Cissell®, Alliance produces a full line of commercial washing machines and dryers with load capacities from 12 to 200 pounds. Certain of our commercial products are also sold in the consumer laundry marketplace. Alliance Laundry's worldwide employment was 1,613 at the end of 2012. With 2012 net revenues of $505.5 million, Alliance Laundry is the world's leading manufacturer of commercial laundry equipment. For more information, visit www.alliancelaundry.com.

Safe Harbor for Forward-Looking Statements

With the exception of the reported actual results, this press release contains predictions, estimates and other forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of our business to differ materially from those expressed or implied by such forward-looking statements. Although we believe that our plans, intentions and expectations reflected in such forward-looking statements are based on reasonable assumptions, we can give no assurance that such plans, intentions, expectations, objectives or goals will be achieved. Important factors that could cause actual results to differ materially from those included in forward-looking statements include: the ability to borrow funds under the December 2012 Credit Facilities; the ability to successfully implement operating strategies and trends affecting the business, liquidity, financial condition and results of operations of the Company; unfavorable economic conditions in certain markets in which we operate; the impact of competition; continued sales to key customers; possible fluctuations in the cost of raw materials and components; possible fluctuations in currency exchange rates, which affect the competitiveness of our products abroad; possible fluctuations in interest rates, which affects our earnings and cash flows; the impact of substantial leverage and debt service on us; possible loss of suppliers; risks related to our asset backed securitization facility; dependence on key personnel; labor relations; potential liability for environmental, health and safety matters; potential future legal proceedings and litigation and other risks listed from time to time in the Company's reports, including, but not limited to our Annual Report for the Year Ended December 31, 2012.

Financial information for Alliance Laundry Holdings LLC appears on the next six pages for the three and six months ended June 30, 2013.

 
 
ALLIANCE LAUNDRY HOLDINGS LLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands)
    
June 30,December 31,
20132012
Assets
Current assets:
Cash and cash equivalents$65,003$33,341
Restricted cash - for securitization investors19,65522,112
Accounts receivable, net26,94714,595
Inventories, net40,73538,378
Accounts receivable - restricted for securitization investors77,56879,315
Loans receivable, net - restricted for securitization investors45,65244,048
Deferred income tax asset, net11,26610,035
Prepaid expenses and other assets 5,510  4,519 
Total current assets292,336246,343
 
Loans receivable, net9,82410,555
Property, plant and equipment, net70,85563,978
Goodwill180,594180,954
Loans receivable, net - restricted for securitization investors210,035206,219
Deferred income tax asset, net566566
Debt issuance costs, net18,79412,200
Intangible assets, net 127,401  129,282 
Total assets$910,405 $850,097 
 
Liabilities and Member(s)' Equity/(Deficit)
Current liabilities:
Current portion of long-term debt$982$3,750
Revolving credit facility--
Accounts payable53,73848,433
Asset backed borrowings - owed to securitization investors97,28481,626
Other current liabilities 41,999  34,382 
Total current liabilities194,003168,191
 
Long-term debt, net474,500478,300
Asset backed borrowings - owed to securitization investors200,905184,970
Deferred income tax liability, net35,34827,413
Other long-term liabilities 21,121  22,927 
Total liabilities925,877881,801
 
Commitments and contingencies
Member(s)' equity/(deficit) (15,472) (31,704)
Total liabilities and member(s)' equity/(deficit)$910,405 $850,097 
 
 
ALLIANCE LAUNDRY HOLDINGS LLC
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
(in thousands)
      
Three Months EndedSix Months Ended
June 30,June 30,June 30,June 30,
2013201220132012
 
Net revenues:
Equipment and service parts$140,351$126,749$260,556$241,376
Equipment financing, net 2,040 2,192  4,437  4,718 
Net revenues142,391128,941264,993246,094
Cost of sales 98,817 92,218  185,274  177,879 
Gross profit 43,574 36,723  79,719  68,215 
 
Selling, general and administrative expenses19,38916,93636,79532,710
Other costs 392 94  856  1,014 
Total operating expenses 19,781 17,030  37,651  33,724 
Operating income23,79319,69342,06834,491
 
Interest expense8,7954,02417,8419,992
Loss from early extinguishment of debt - 6,239  1,871  6,239 
Income before taxes14,9989,43022,35618,260
Provision for income taxes 5,009 3,401  7,695  6,727 
Net income$9,989$6,029 $14,661 $11,533 
 
 
Comprehensive income:
Net income$9,989$6,029$14,661$11,533
Foreign currency translation adjustment, net744(3,032)(687)(1,575)
Change in pension liability and other benefits, net 850 393  1,170  620 
Comprehensive income$11,583$3,390 $15,144 $10,578 
 
 
ALLIANCE LAUNDRY HOLDINGS LLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
    
Six Months Ended
June 30,June 30,
20132012
 
Cash flows from operating activities:
Net income$14,661$11,533
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization6,6816,507
Amortization of debt issuance costs2,8021,688
Amortization of original issue discount254113
Non-cash interest (income)/expense(253)335
Non-cash loss/(gain) on commodity & foreign exchange contracts, net1,058(171)
Non-cash executive unit compensation1,0951,389
Non-cash charge for pension and post-retirement benefit plans555703
Non-cash charge for write-off of debt issuance costs5774,026
Non-cash charge for write-off of original issue discount on long-term borrowings1782,213
Deferred income taxes6,0955,026
Other, net(11)(61)
Changes in assets and liabilities:
Accounts and loans receivable, net(11,834)(7,176)
Accounts receivable - restricted for securitization investors1,747(4,545)
Inventories, net(2,491)433
Loans receivable, net - restricted for securitization investors(5,420)(455)
Other assets(1,021)(65)
Accounts payable5,434598
Other liabilities 4,868  (2,474)
Net cash provided by operating activities 24,975  19,617 
 
Cash flows from investing activities:
Capital expenditures(11,904) Read Full Story

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